19 October 2026
If you are covering bond markets this morning, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Bond markets have started the week relatively calmly overall, despite events in France over the weekend adding another layer of uncertainty. While French bonds have come under renewed pressure as investors digest the latest political unrest, the picture in the UK has been considerably calmer, with gilts holding up relatively well ahead of next week’s Budget.
“That does not mean investors are short of things to worry about. Oil prices rose last week, keeping the risk of renewed inflationary pressure in the background, while concerns around the scale of AI-related spending are also weighing on sentiment. Against that backdrop we have seen credit spreads widen, suggesting investors are demanding a little more compensation for taking on corporate risk.
“Government bonds have been relatively resilient, and while it is still early days, this could be a sign that concerns around the outlook for economic growth are starting to outweigh fears about inflation. If that continues, it would represent quite a shift in the bond market narrative we have seen for much of this year.
“For the UK, attention will turn increasingly towards next week’s Budget. Gilts may be enjoying slightly calmer waters than French bonds for now, but the Chancellor will know that investors remain highly sensitive to questions around borrowing and fiscal credibility. Markets will be looking for a credible plan that supports growth without adding materially to borrowing or reigniting inflation concerns, and any surprises on that front could quickly disturb the relative calm we are currently seeing.”
